Tag: Politics

“The People Just Don’t Understand”

US politics and health care

The latest political spin in the U.S. is that the Democrats lost the seat that was held by the late Senator Edward Kennedy in Massachusetts because the people “just don’t understand the health care legislation.”  It is not, so they say, that the legislation is bad or that it will raise taxes or result in rationing.  No, it is not the legislation at all. It is that the White House has failed to communicate the key elements of the health care legislation clearly.

I beg to disagree.  I think that we, the electorate, understand the legislation, but we do not like it, and do not want it.  We do not want it shoved down our throats; we do not want our tax dollars used to blatantly buy off votes for the legislation; we do not want our voices to be ignored.

And the White House knows that the public has turned against this legislation because it now knows more about the bill, not less.  Why else would they endorse the secretive, closed-door sessions to draft the language of the bill?  Why else would they want to hide the legislation from the light of day, from the scrutiny of the press and the public?  Because the less we know, the more likely it is that this shameful legislation will slither through and  become law.

So, spare us, White House.  The reason people do not like the health care legislation is not because you haven’t communicated it clearly enough. It’s because we understand it all too well.

By Sherry Jarrell

The Engine of Economic Growth is Sputtering

Here’s a surprise!

The engine of world economic growth is sputtering.  The most clearSputtering engine evidence of this is the lack of new business formation in developed nations across the globe.  Over the last year, the number of entrepreneurs starting new businesses in the wealthiest of nations dropped 10% from the 2006-07 level; in the U.S., that number fell by 24%.

The contaminants in the fuel line are oppressive government policies that increase the cost of doing business, increase unemployment, and raise the risks to the current labor force of quitting their jobs to try to start new businesses.

At a time when government should be encouraging venture capitalists and the formation of new business, it is instead putting on the brakes to this source of economic growth in the form of cap and trade, compensation regulations, fees on banks, and myriad other explicit and implicit new taxes.  In 2009, nearly half of U.S. employment was generated by small businesses; U.S. companies started through venture capital employed more than 12 million people, or 11 percent of private sector employment, and generated $2.9 trillion in revenues, or 21 percent of U.S. GDP.

Fully 100% of economic growth is created in private industry.  Government simply redistributes that wealth, destroying some portion of it in the process.  Never have we needed non-interventionist government policies more.

By Sherry Jarrell

A Government’s “Economy with the truth”

Citizens being let down by the standards of their governments.

Every so often – but sadly with a certain inevitability and one senses greater frequency – there descends from above the nasty stench of hypocrisy, cover-up and fraud.

No, I am not referring to the conviction recently of a British Minister for using a mobile telephone while driving, even though she was Minster of Justice when the law banning this was passed.

No, the case in question is that of the RAF Chinook Mark 2 helicopter that crashed on 2 June 1994 en route from Northern Ireland to Inverness, killing the special forces crew and 25 senior members of Northern Ireland’s intelligence community in “the worst RAF helicopter accident in peacetime.”

Now accidents happen, but from what has been said very clearly in a variety of sources (SEE HERE IN PARTICULAR), there seems no doubt that the pilots were made the scapegoats in the ensuing enquiry.

This is the key question. Of course, NOBODY may have been “to blame” OR it may be impossible to determine who was to blame, but on the other hand, someone MAY have been to blame, and if that person or persons is in the Ministry of Defence or the Government then it is clear that there may have been the temptation to fix it so that someone ELSE took the blame, in this case the dead and therefore defenceless pilots.

A synopsis of the official report passed to me by a fellow old-boy (alumnus!) with a scientific background in avionics summarizes the main points in this tragedy:

a) There is certainly no evidence to suggest that the pilots were at fault.

b) There is a lot of evidence to suggest that the Government hindered the enquiry.

Some key points:

  • The pilots were worried about the MKII aircraft and asked for a MKI version for this mission. The MoD declined this request.
  • The aircraft was flying low, in a straight line towards the Mull. 18 seconds before impact the pilot requested a left hand turn to miss the Mull. The aircraft never turned.
  • The FADECs (Full Authority Digital Engine Control) were programmed to record ‘failures in flight’. Looking at the FADEC’s memory after the crash showed no failures. This was the main evidence against the pilots. However, there had been several instances where other MKII pilots had lost control of the aircraft and the FADEC showed no ‘failures’. In their assessment of the code after the crash, EDS said that the error reporting software had been coded incorrectly.
  • The problem with the FADEC that had been seen by several pilots was the fact that the rotors started to rotate to 120%. (Faster than they should).
  • Two key personnel who should have given evidence at the enquiry (an engineer FADEC expert and a pilot who had experienced problems whilst flying the aircraft) were not allowed to give evidence.
  • Prior to the accident the Government were actually in the process of suing the FADEC manufacturer because of its failings.

Two points in particular strike me personally:

A) Point SIX above; the government was AT THE TIME of the accident SUING the FADEC manufacturer because the electronics were defective in some way. Now, as a layman, it seems to me bleedin’ obvious that modern aircraft are extremely dependent on their electronics. If there were such severe faults with the fundamental instruments on this plane as there seem to have been with the FADEC (the top pilot refused to fly the craft and the govt were suing the software providers; does it get more serious than that??!!) then WHY WAS IT ALLOWED TO FLY IN THE FIRST PLACE?

B) So, KNOWING all the above, WHO authorised this aircraft to fly in poor weather conditions (it was foggy) with 25 KEY intelligence personnel on board? Apart from the personal tragedy for so many families, the loss of these key people was a devastating blow to the then government in its campaign against terrorism in Northern Ireland.

Well, despite all the above it was the two dead pilots who got the blame for what seems to have been appalling management over a long period. The Chinook’s electronics were clearly known to be dodgy yet the machine had not been grounded. You cannot imagine this happening in the civil aviation business (I HOPE!), but this is not the first time that the British government has sought to exempt itself from the strict standards it imposes on the private sector.

But the bottom line is, it is pretty clear that JUSTICE has not been done and those whose poor management and decisions almost certainly led to the accident have never been brought to account.  The British Conservative party has pledged to re-examine the case. One has to ask why the CURRENT party has refused to do this. Could they themselves have something to hide?

IS this – as it seems to be – a genuine Government cover-up? and if so, do they do this sort of thing because they think that:

A) the public are idiots or B) they can get away with it? Or of course both.

We are not talking about a faceless, fascist bureaucracy here, but about BRITAIN, where standards of decency, honesty, openness and Justice are supposed to apply – or at least once applied. As for the MOD (Ministry of Defence) not only has it NOT accepted any responsibility for this accident but they are now paid BONUSES! Yes, just like City Bankers ….. And this at a time when I am unaware of bonuses being paid to soldiers fighting and often dying in Iraq and Afghanistan.

The families of those killed deserve the truth. Without the truth being primordial in our society, we descend into the realms of a banana republic or Central Asian dictatorship.

By Chris Snuggs

Follow-up: Enemy Combatant versus Criminal

This is not the correct way to defend a great Nation in a fair and just manner.

In an earlier post, my colleague Paul Handover left us with an important question:  Does the public’s lack of clarity about the “underwear bomber’s” status as an enemy combatant or a criminal undermine the appearance of impartiality of the U.S. judicial system?

US Attorney General Eric Holder

Paul reviewed the legal development of the “enemy combatant” designation, ending with a March 2009 pronouncement from Eric Holder, the current U.S. Attorney General, that the U.S. had abandoned the Bush administration’s use of the term.  Mr. Holder continued, “As we work toward developing a new policy to govern detainees, it is essential that we operate in a manner that strengthens our national security, is consistent with our values, and is governed by law.”

A new policy that “strengthens national security?”  I think it is blatantly clear that an intense and timely interrogation of the bomber does more to protect our national security than lawyering him up and giving him the right to not speak.  As you read this, Michael Marinaccio, an attorney for Zarein Ahmedzay,  who is suspected of plotting a terror attack on NYC, is seeking to have all the information gathered by officials after his client was represented by counsel  thrown out as illegal, under the civil and criminal law of the U.S.    We can likely expect the same in the underwear bomber case.

A new policy that is “consistent with our values?”  Treating terrorists as terrorists is perfectly consistent with my values.  I am not sure what he is trying to say here.  Then again, maybe I do know what he is trying to say: that it is “wrong” to treat a terrorist as an enemy combatant, and “right” to give that person all the rights of a U.S. citizen, including the right to an attorney and the right to remain silent?  Those may be Mr. Holder’s values, but they aren’t mine and, as you’ll see below, they are not those of the former U.S. Attorney General either.

A new, as yet undetermined, policy that is “governed by law?”  This coming from the same legal mind that decided to try the five 9/11 terrorists  in New York City federal court?  A decision based on what legal precedent?  There is no legal precedence.  On what existing, well-formulated policy? There is no such policy.

Mukasey, US Attorney General 2007-2009

But on the legal subtleties surrounding this issue, I defer to Mr.  Michael Mukasey, a former federal judge who oversaw cases relating to the 1993 World Trade Center attacks.  Mr. Mukasey was the U.S. Attorney General from 2007 to 2009 before retiring and being replaced by Eric Holder.   His analysis is as follows:

Had Abdulmutallab [the alleged underwear bomber. Ed.] been turned over immediately to interrogators intent on gathering intelligence, valuable facts could have been gathered and perhaps acted upon. Indeed, a White House spokesman has confirmed that Abdulmutallab did disclose some actionable intelligence before he fell silent on advice of counsel. Nor is it any comfort to be told, as we were, by the senior intelligence adviser …that we can learn facts from Abdulmutallab as part of a plea bargaining process in connection with his prosecution…Holding Abdulmutallab for a time in military custody, regardless of where he is ultimately to be charged, would have been entirely lawful—even in the view of the current administration, which has taken the position that it needs no further legislative authority to hold dangerous detainees even for a lengthy period in the United States … What the gaffes, the almost comically strained avoidance of such direct terms as “war” and “Islamist terrorism,” and the failure to think of Abdulmutallab as a potential source of intelligence rather than simply as a criminal defendant seem to reflect is that some in the executive branch are focused more on not sounding like their predecessors than they are on finding and neutralizing people who believe it is their religious duty to kill us. That’s too bad, because the Constitution vests “the executive power”—not some of it, all of it—in the president. He, and those acting at his direction, are responsible for protecting us.

The full article from which I quoted is here.

By Sherry Jarrell


President Obama: A Tax Increase Does not Reduce Costs!

A novel, and incorrect, way to lower costs.

The latest from Washington on Health Care Reform is the Senate’s version which taxes insurance companies on plans valued at over $8,500 for individuals and $23,000 for couples.

President Obama has defended the tax as a way to drive down health costs.  “I’m on record as saying that taxing Cadillac plans that don’t make people healthier but just take more money out of their pockets because they’re paying more for insurance than they need to, that’s actually a good idea, and that helps bend the cost curve,” the president said in an interview with National Public Radio just before Christmas. “That helps to reduce the cost of health care over the long term. I think that’s a smart thing to do.”

Huh?  Mr. President, you need an Econ 101 primer. Let’s begin now, with supply and demand:Leftward shift in supply

Supply is an upward-sloping marginal cost curve, and includes the taxes and fees a business must pay to the government.  By imposing this tax, the supply curve of insurance companies will shift up and to the left, as shown in the graph, representing a higher cost per unit of insurance coverage.  The demand curve slopes down, so when intersected by a more costly supply curve, the final price to consumers rise and the amount of insurance coverage falls.   Period. End of story.  Indisputable fact.  And nothing Obama or the Senate says will change this fact, though they will try.

By Sherry Jarrell

More Shenanigans on U.S. Health Care Reform

Is this really what the Founding Fathers had in mind for America?

This topic may seem to be more about politics than economics, but anything related to health care reform is squarely rooted in the most important of economic issues:  the costs of doing business, the size of the government, and the potentially oppressive role of government in private industry.

To that end, the following is a must-read, and should make you angry, no matter what your political persuasion.  http://bostonherald.com/business/healthcare/view.bg?articleid=1224249&format=text

In this article, we see how the Senate Democrats are going to do whatever it takes to get their version of health care reform through, even if it comes down to ‘stealing’ votes.  Could the timing of this Massachusetts special election, to replace the temporary replacement put in for the late Senator Edward Kennedy, be one of the reasons that the Senate wants to rush this reform through before the President’s State of the Union Address, typically set for mid-January, though the White House is curiously reluctant to commit to a date….  ?

By Sherry Jarrell

U.S. Health Care Reform: The Ultimate Intrusion

US health care reform comes with strings, nay chains.

Once a single-payer health care program is enacted into law, the US Government will assume the right to tell us how to live our lives.  Our health will be their responsibility.  Government officials will feel empowered to tell us what to eat and drink, what risks to take, whether we can smoke, how much weight we can gain and how much exercise we must get.

If you have any doubt, consider the following statements from the Obama administration over the last year. The clear message is if the government pays for something with tax dollars, it has both a right and a responsibility to tell the recipients of those dollars how to conduct themselves.

  • “This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success,” Obama said. “But what gets people upset — and rightfully so — are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.”   http://wcbstv.com/national/executive.pay.limits.2.926332.html
  • President Obama challenged top bankers to explore “every responsible way” to increase lending, saying they were obliged to help after being rescued by taxpayers. He asked them to “take a third and fourth look” at their small-business lending. He also exhorted the executives — both in private and in public — to drop their opposition to an overhaul of the nation’s financial industry.  “If they wish to fight commonsense consumer protections, that’s a fight I’m more than willing to have,” Obama told reportersin the Diplomatic Reception Room of the executive mansion.  http://www.msnbc.msn.com/id/34416646/ns/business-us_business/
  • Obama said it is “wholly unreasonable to expect that American taxpayers would or should hand this administration or any administration a $700 billion blank check with absolutely no oversight or conditions, when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess.”  Obama said taxpayers should be treated like investors if they are being asked to underwrite the bailout.  http://www.cnn.com/2008/POLITICS/09/23/campaign.wrap/index.html
  • “What’s really frustrating me right now is that you’ve got these same banks who benefited from taxpayer assistance who are fighting tooth and nail with their lobbyists up on Capitol Hill, fighting against financial regulatory control,” Obama added.  http://au.biz.yahoo.com/091213/31/2aafh.html

By Sherry Jarrell

The Troubling U.S. Unemployment Rate

Grim news continues

This isn't funny!

The U.S. unemployment rate remains at a 26-year high.  This is troubling for two reasons. One, the struggle and suffering of the unemployed (and underemployed) and the impact on the world economy.

Two, the mixed signal it gives policy makers.  I worry that the White House will think that it needs to do “more” of what it’s been doing, and dismiss any negative comments about its economic policies as a knee-jerk reaction to the unemployment figure when I, in fact, would be saying the same things if the unemployment figures had improved.  It would be a harder sell, true, but that doesn’t change the facts.

The reason?  Because I believe we would be in a better position today, with lower unemployment — no matter what the current unemployment rate — and higher growth, had the stimulus program never been initiated.  I base this on my understanding of the fundamentals of how the economy works, how businesses create value, and how labor makes itself indispensable to industry.

And none of these areas were helped or improved by the economic policies of this President.

By Sherry Jarrell

Blogging and jail!

Is blogging the same as journalism?

There is a very interesting Post on the Blog TechCrunch.  Let me quote a little from that Post:

Last week two bloggers, Steven Frischling and Chris Elliot, were visited by TSA agents and threatened with jail time if they did not reveal their source of the TSA Travel Directive that they each published shortly after the attempted terrorist attack on Christmas day. Frischling caved immediately and handed over his computer. Elliot did not. Since then the Department of Homeland Security has dropped the subpoenas, but there is a bigger issue here. The protection of sources is a cornerstone of our freedom of speech.As bloggers, we have a duty of confidentiality to our sources. And that means keeping information confidential even if threatened with the tyranny of government. And even if the legislatures and courts haven’t decided that as bloggers we have real rights protecting us from that tyranny.

I’ll never be surprised by a tyrannical government. In a sense, it’s their job. It’s our job as bloggers to stand up to that tyranny, even if our liberty has been threatened. Journalists have gone to jail rather than disclose their sources. If bloggers want the same level of respect, and protection from government by the courts, they need to stand up for what’s right.

Read more of this Post

Establishing “cause and effect”

In this second of two posts on John Bougearel’s guest post at Naked Capitalism, Sherry Jarrell provides an economist’s response.

Response to “2010: Foreseeable and Unforeseeable Risks …”

In this wide-ranging and comprehensive piece, John Bougearel warns of the repercussions on the world economy of the steps taken to remedy the financial crisis.  He warns of the impact of the Federal Reserve absorbing the toxic assets and shaky collateral on its balance sheet, and of the unsustainability of Social Security and Medicare in an aging demographic.   On these basic facts, I agree.

One of the most difficult things for any writer to do when talking about economics and finance is to establish cause and effect.  In trying to analyze past policy decisions and recommend future actions, however, it is absolutely imperative to distinguish cause and effect.  In my view, Mr. Bougearel’s overview is either silent on this issue or implicitly assigns blame to the markets, when it belongs squarely on the doorstep of misguided government regulations. Continue reading “Establishing “cause and effect”” →